The government’s decision to extend the contracts of two discredited companies that carry out disability benefit assessments has been branded “appalling”, “shocking” and “a complete con”.

The move has also been criticised by the Scottish government.

Sarah Newton, the minister for disabled people, told MPs in a written statement this week that she planned to extend the assessment contracts for the two companies that carry out the personal independence payment (PIP) assessments – Atos and Capita – by a further two years.

The contracts had been due to end in the middle of 2019.

Newton also announced that the Department for Work and Pensions (DWP) was developing its own IT system that would allow it to “enable more providers to deliver PIP”.

Some commentators – including Frank Field, chair of the Commons work and pensions committee – took this to mean that Newton was threatening that DWP would carry out PIP assessments itself if Atos and Capita did not improve their performance over the next two years.

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But one disabled people’s organisation, Buckinghamshire Disability Service (BuDS), said on its Facebook page that the reason for the two-year contract extension was that Atos “owns the IT system that DWP rely on for PIP claims, and they can’t sack them until DWP has developed its own IT system”.

BuDS said: “What a shocking way to run a public service – DWP is effectively chained to a corpse.”

Atos has refused to comment on whether it owns the current PIP IT system.

Asked whether Newton’s announcement meant the government was considering bringing PIP assessments in-house, a DWP spokeswoman said: “Our focus is the outcomes achieved rather than who delivers them.

“The department will continue to keep the most appropriate method of delivery under review.

“The department will always consider the quality of assessments and the claimant experience as well as the value for money offered when considering whether to contract out a service.”

She declined to say whether DWP’s new IT system would also be used for the work capability assessment (WCA), which tests eligibility for the out-of-work disability benefit employment and support allowance (ESA).

If the new IT system was also used for the WCA, it would put a question-mark over whether that contract could also be brought in-house and delivered by DWP.

In February, a report by Field’s committee found that the PIP and ESA assessment systems were being undermined by a “pervasive culture of mistrust”, fuelled by widespread claims that assessors from Atos, Capita and Maximus were deliberately trying to prevent disabled people receiving the support they were entitled to.

Last October, DNS revealed that complaints about the PIP assessment process had risen by nearly 900 per cent in just one year, also apparently corroborating the results of the investigation.

Further DNS reports in February this year – based on freedom of information data released by DWP to campaigner John Slater – revealed “shocking” failings by Atos and Capita in how they were fulfilling their PIP assessment contracts.

Newton also announced this week that DWP would pilot the video-recording of PIP assessments – a measure which could help prevent dishonest assessment reports – with a plan to roll this out across the country as “a standard part of the process” (see separate story).

But grassroots groups and their allies, disabled people’s organisations, disabled campaigners and politicians have been scathing in their responses to the announcement of the two-year contract extension.

She said: “IT is the least of the problems with ESA and PIP assessments.

“This move does not address substandard disability assessments and reports, poor performance by disability assessment contractors, high staff turnover, and a raft of other issues.

“That Atos and Capita had their contracts extended in spite of their appalling performance documented by the work and pensions committee, and in the management information released by DWP under duress through the Freedom of Information Act, is nothing short of a scandal and Frank Field should know better.

“This is rewarding failure.”

Ken Butler, welfare benefits adviser at Disability Rights UK, said: “Given their track record of inaccurate assessments, any continuation of PIP contracts to Atos and Capita is unwarranted.

“Retaining Atos and Capita will only replicate that for another two years

“Rather than developing a DWP IT system as a means of bringing PIP assessments in-house, the aim seems to be to give money-making opportunities to private companies.”

John Slater also criticised the announcement.

He said: “I would be concerned if the DWP sees the solution to the problems with PIP and ESA being new IT development.

“If that is the case then it seems it has learned nothing from universal credit.

“It needs to fix the problems with the PIP and ESA processes and then look at where new IT can help.”

And he said that “bringing assessments in-house and developing new IT” would not “get around the problem of needing high-quality healthcare professionals to carry out the assessments”.

Disabled campaigner Kaliya Franklin, who tweets at @BendyGirl, and was a member of the grassroots Spartacus Network that researches issues on disability and social security, said on Twitter: “Is having the capacity to bring assessments back in house the same thing as bringing assessments back in house, or just another empty (albeit new) promise?”

Stephen Lloyd, the disabled Liberal Democrat shadow work and pensions spokesman, said it was “appalling” that the government “sees fit to reward these companies by extending their contracts despite their shocking performance figures and outcomes”.

And Marsha de Cordova, Labour’s shadow minister for disabled people, another leading disabled politician, said on Twitter: “Nearly a third of #PIP assessments are not up to scratch. Nearly 70 per cent of PIP appeals are successful. PIP claimants are forced to wait for 11 weeks for decisions.

But Field welcomed the announcement that DWP was developing its own PIP IT capacity.

He said it was “further credit to the thousands of disabled people who sent evidence to us” and that having the capacity to bring assessments back in-house would put DWP “in a far stronger position to turn the screws on its hitherto failing contractors, in the interests of claimants and all taxpayers”.

An Atos spokesman said: “We welcome the statement from the minister and look forward to ongoing discussions with the department to achieve our shared objectives on continuous improvement.”

Capita declined to comment.

The two-year extension for Atos and Capita is unlikely to apply in Scotland because the Scottish government is due to take over responsibility for PIP assessments in 2020 and has promised to end the practice of using private sector organisations to carry them out.

The Scottish government’s social security minister, Jeane Freeman, told DNS: “We have repeatedly called on the UK government to halt the roll-out of PIP in Scotland.

“Given the level of criticism aimed at the current assessment providers, I am concerned that DWP are exploring options to extend these arrangements.

“Legislation to establish a new Scottish social security system – built on dignity and respect – was recently passed by the Scottish parliament.

“Once the social security delivery infrastructure is in place, the Scottish government will start the delivery of these disability benefits during the lifetime of this parliament.”

She added: “We have always been clear that assessments for disability benefits will be ‎designed around the needs of our clients.

“We will use existing information where we can, minimising the need for face-to-face assessments.

“We have categorically ruled out the use of the private sector in assessments, and this has been established in the Social Security (Scotland) Act.”

A DWP spokeswoman said her department was “working closely with the Scottish government”.

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